Here are some quick definitions of the most searched finance terms on the internet.

  1. GDP. GDP stands for Gross Domestic Product. It is used to measure the total value of goods and services produced in a country. Gross National Product (GNP) is sometimes considered a better measure because it adds the net effect of foreign investments to GDP.
  2. Managed Funds / Mutual Funds

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  1. Equity. Equity is what’s left over when have assets (e.g. your house) minus liabilities (e.g. your mortgage). In the context of a company, an asset might be a brand, and a liability might be long-term debt. You can find a company’s total equity on its Balance Sheet.
  2. ROI. ROI stands for Return on Investment.

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  1. EBITDA. EBITDA stands for Earnings Before Interest, Tax, Depreciation and Amortisation. All of these items may be found on a company’s Income Statement. It’s a measure of the profitability of a company. Some analysts say it better reflects the cash flow of a company than net profit / net income because it excludes the effect of depreciation and amortisation. In the wake of Global Financial Crisis, Warren Buffett famously wrote to his shareholders, “Beware geeks bearing formulas.” Click here to learn more about EBITDA, including risks and how to calculate it for yourself.

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